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1/19/2006

how singaporeans wasted their hard earned money

in coes which is a piece of paper that lasts for 10 years. in scrapping their almost brand new cars that can last for another 10 or more years. in a subsidised hdb flat that will eventually be valueless. in upgrading their eventually valueless flats by pumping in more money. now you know how singaporeans spent their life savings and ended up as hard up cases. owning a hdb flat is not an investment but an expendable item just like a car. instead of 10 years, it is 99 years. the initial profits due to inflation and speculation will end up as nothing with time. it is not a freehold or 999 year leasehold where the value could stay for a long time and even appreciate more the longer it goes into the future. a 99 year old lease is a depreciating asset, a consumable asset.

6 comments:

Matilah_Singapura said...

People make decisions on the margin and man is a utility maximising being.

People have to live somewhere. If the state controls the land and housing, you have no choice if you don't have the means to buy private real estate.

Like everything in the socialist sphere - there is no price mechnism. In fact, the price mechanism is tinkered with so that the state benefits from peoples "hardship" and pockets all the dough - thereby further reducing the power of the people, and augmenting the power of the state.

"Upgrading" was a political ploy and was very effective in keeping the incumbent party in power.

Any trip to an HDB estate will reveal several luxury cars: BMW's, Mercs, Lexus etc in the carparks - all obviously with full COE paid.

So much for subsidised housing: buy subsidised house, pay full COE and buy luxury car.

A bit screwed, no? ;-)

redbean said...

the founding fathers always have quite lofty ideals. these may seem to be naive after sometime and the natural greed and selfish interest of man will rear its ugly face.

the hdb flats was such a great anchor for the people. but a poorly thought out policy screwed up everything.

for those who can afford a hdb flat and a lexus, i think they have screwed themselves up by thinking that they are getting the best of both world. with that kind of money they will be better off investing in a freehold property and a smaller car.

what they are holding on to are two depreciating assets whose values are being consumed by the days.

for those who have no choice, they just got to hang on to their hdb flats.

Speedwing said...

HDB flats are the dreams of most Singaporeans. In order to possess one, I believe one must be married. The couple will then be entitled to $30,000 rebate. If you decide to but a HDB near your parents' neighbourhod, you get another $10,000. That is not bad at all. Ofcourse landed properties are more desirable, but no many can afford that.

I am also a firm believer of not wasting. To scrap a 3 year pold car for the sake of lower COE is criminal. One may be very capable to pay for it, but it is still a waste, no less. The earth's natural resources is not without limits. We have to be careful.

redbean said...

hi speed,

it is the playing with numbers. if harrods has an item that cost $200 but marked up to $3000 to sell. one month later it says spring sales, 30% discount. but if you sign up as a member, another 10% discount. if one buys two, additional 10% discount. it still costs a lot and harrods will still make a lot of profits.

as for cars, yes it is criminal. it is sinful. when i scrapped my 10 year old car, i nearly cried. it was in so good a condition, i took real good care of it, that it will last another 10 years with no problem. such a waste as i watched it being pulled away. a beautiful car going into the scrap yard.

this is a sin that we will pay one day, or already paying. a policy of waste.

Speedwing said...

If you had so much attachment to your old car you could have just purchased another 10 years COE and continued using the same old faithful. Why didn't you??

redbean said...

there is a residual value on the parf which comes to quite a sum of money. and a second 10 year means heavier road tax.

not economical. cheaper to sell it and get another.

there are many who find it even cheaper to scrap the car at 5 or 6 years and get a new one.